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A blog written for those whose interests more or less match mine.

Using public office for private gain: With shift on Cuba, Trump could undercut his company’s hotel-industry rivals

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In the Washington Post Drew Harwell and Jonathan O’Connell report a pretty obvious example of Trump making a decision that hurts his business rivals:

By rolling back Obama-era policies that allowed more private business investment in Cuba, President Trump would be leveraging the power of his office, like others who came before him, to shift Washington’s approach to the communist island.

But as the owner of a real estate company with a big stake in hotels and resorts, Trump brings an added element to an issue that is unique to his presidency — the ability, through his official actions, to undermine a growth area for his industry rivals who have raced in recent years to establish a foothold in a lucrative new market.

Starwood Hotels and Resorts, which merged with Marriott International to form the world’s largest hotel chain, last year debuted the first Cuban hotel managed by a U.S. company in nearly 60 years, taking advantage of President Barack Obama’s 2014 move to normalize relations with Cuba and lighten regulations enforcing the U.S. embargo on the island.

Trump is expected to announce in Miami on Friday his intention to ban certain financial transactions between U.S. businesses and the Cuban military, whose companies control much of the island’s economy and a significant share of the tourism and hotel sector.

That directive could undercut efforts by the U.S. hotel industry, which hopes to use the Starwood deal as a template as it continues to push Congress to lift the ongoing U.S. embargo completely.

The issue offers a reminder of Trump’s dual roles, public and private, as a result of his decision to retain his sizable ownership stake in his company.

Although Obama’s policies were popular with some Cuban Americans who have welcomed the chance to travel to the island and send more money to family, Trump’s new directive is likely to satisfy others in the community who argued that Obama went too far in appeasing the Castro regime without securing human rights concessions. Trump has criticized the Obama normalization with Cuba as a “bad deal.”

Nonetheless, as a businessman whose properties include golf resorts and luxury hotels from Florida to Scotland to Dubai, Trump in the past has signaled his interest in the potential financial opportunities in Cuba.

He told CNN last year that he would like to open a hotel in Cuba “at the right time, when we’re allowed to do it.”

As part of an ethics pledge, Trump’s company has vowed to pursue no new foreign deals during his presidency, making a potential foray into Cuba off limits for now. Yet, according to one industry expert, a presidential directive restricting efforts there by Starwood or other hotel chains would, in effect, neutralize a chief rival’s ability to gain an early advantage.

“What’s the president going to say? That the largest hotel company in the world, a competitor, is not allowed to renew its license” to operate in the country? asked Julia Sweig, a longtime Cuba scholar and former adviser to Starwood who has called for normalizing relations with the island. “That could be interpreted as the president is going to hold things up for the competition until the Trump Organization is ready to go down there.” . . .

Continue reading.

Corruption.

Written by LeisureGuy

16 June 2017 at 9:07 am

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